Rustic home on beautiful lake

Purchasing a lake house or cabin can be a dream come true. The tranquility and beauty of being on the water can provide a perfect escape from the hustle and bustle of everyday life. However, lake homes don’t list as often as other real estate. There’s fewer properties on the market, and buying one can be competitive.

Making a winning offer begins well before drafting the offer to purchase. The process is divided into three phases: Get Clarity, Position to Offer, and Make the Offer.

Phase 1: Get Clarity

Most buyers begin their search with lots of excitement but little clarity. Unfortunately, if you aren’t clear on what you’re looking for, it’s very difficult to find it. Lack of clarity causes poorly designed searches resulting in properties you can have very little confidence in.

To make a strong offer, a buyer needs to be very confident that the lifestyle they want can be achieved on a specific lake with a particular property they can unquestionably afford to purchase by a specific date. If a buyer isn’t confident in any area, their offer will be weaker as they try to hedge and protect themself with a lower offer price, less earnest money, more contingencies, or a far-off closing date.

However, before you can have confidence in all five areas, you must first become absolutely clear on each of them.

1. Define The Lifestyle You Want

When you buy a lake property, you buy a lifestyle that includes certain activities and experiences. So, to ensure a property can provide the lifestyle you want, you must first know which activities and experiences you want.

To define your ideal lifestyle, try brainstorming a list of all the activities and experiences you and your guests will want to enjoy. For some ideas, check out 67 Reasons To Buy A Lake Home.

When you’ve finished brainstorming, divide the items into must-have and nice-to-have lifestyle lists. Use your must-have list to filter lakes and properties out of your search that won’t allow those activities and experiences. Save your nice-to-have list for later; it’ll come in handy as you tour and compare properties.

2. Identify Lake Requirements

You’re not just buying a house; you’re buying a lake. Each lake has features that will enable or prevent you from enjoying items on your must-have lifestyle list.

For example, if you want to take your family waterskiing, you’ll need to live on what’s called a “full-rec” lake where the boating ordinances will allow you to go fast enough and create waves. On the other hand, if you’re more interested in kayaking or paddle boarding, it might not matter if a lake is full-rec or not. Just understand that properties on full-rec lakes are usually more expensive, so it’s in your best interest to require a lake to be full-rec only if it’s essential to achieving your must-have lifestyle.

We’ve identified eight lake features that have a large impact on lifestyle. When you subscribe to listing alerts on any lake on our website, you can add other lakes to your search based on which of the eight features are important to you. These features include:

  1. Full Rec (vs. no-wake)
  2. Sandy Bottom (min 70%)
  3. Clear Water (min 12ft clarity)
  4. Large (125+ acres)
  5. Deep (min 15ft ave)
  6. Lots of Shoreline (min 3.5 miles)
  7. Has Bar/Restaurant (on the shoreline)
  8. Distance From a City

Of course, many other aspects of a lake affect lifestyle. Some questions to consider include the following:

  • Does the water have a particular color, smell, or taste?
  • Do algae cover parts of the lake during certain times of the year?
  • What is the current water level with respect to its ordinary high water mark? What have been the highest and lowest levels in the last five years?
  • If a dam controls the water level, do they draw-down the water in the fall?
  • How are weeds managed? Are there special assessments imposed for this?
  • Are there regulations regarding weed control techniques along property shorelines?
  • Are there local or county boating ordinances that apply to the lake?  What are the regulations?
  • Is there a lake association? What are their bylaws and fees?
  • Is there a lake district? What services does it provide, and what are the taxes?
  • What are the zoning regulations regarding remodels and expansions?
  • What are the dock and boathouse regulations?
  • Where can you take boats in and out?
  • What types of fish are present? Are there local fishing regulations?

For more information on a specific lake, check out its page on our website. If an active lake association is listed, be sure to contact them.

3. Identify Property Requirements

Take a look at your must-have lifestyle list and identify property characteristics that will be required. These requirements can be divided into Shoreline, Terrain, Location, and Home categories.

Shoreline

Do you need to be directly on the water, or is lake “access” ok? Do you need a sandy beach and shallow entry for kids to play? What’s the boat traffic like near the shoreline? Do you need a dock or a boathouse? Will fluctuating water levels cause any issues?

Terrain

Can you go up and down stairs to access the lake, or do you need a flat lot? What about your guests? If you’re buying vacant land, how big does the lot need to be to build the home you want? What are the setbacks? Is the buildable area reduced by floodplains or wetlands? If flood insurance is required, what’s the annual cost? If not, is a flood determination provided as proof?

Location

Do you need an eastern shore to enjoy sunsets or a western shore for sunrises? If your kids are in school, what district do you want to be in? How close do you need to be to work or shopping? Do you need high-speed internet? How about mobile phone coverage? If a boat launch is nearby, where do people park, and have there been trespassing issues?

Home

It’s usually not a good idea to limit your search based on the number of bedrooms, bathrooms, or garage stalls you actually need. Better to require one less bedroom and bathroom than you need and tour properties to understand your options. Unlike a lake or a property’s shoreline, location, or terrain, a home can always be improved. A room can sometimes be converted into a bedroom or bathroom. An unfinished basement may have plumbing pre-installed for a future bathroom. A garage can be built if there’s room on the lot.

You won’t be able to set search filters for many property requirements. However, you can usually tell if a property has the necessary characteristics by looking at the listing pictures, details, and descriptions. Otherwise, ask your buyer’s agent for help.

4. Prove What You Can Afford

You’ll need to have something that proves what you can afford. For cash buyers, “proof of funds” could include a letter from your bank, a redacted copy of an account statement, or a redacted screenshot of a liquid investment account. Buyers financing their purchase will need a letter of pre-approval from a lender.

You’ll need financial proof for three reasons:

  1. To set up your search. It’s no fun falling in love with a lake property only to find out you can’t afford it.
  2. To tour properties. Some sellers may only approve a showing request if the buyer provides a letter of pre-approval or proof of funds. Plus, touring properties you can’t afford wastes everyone’s time and resources.
  3. To make a strong offer. Strong offers include some form of proof that you can afford to pay what you’re offering. If the lake home of your dreams lists over the weekend, you’ll want to tour it and make an offer immediately. If you don’t have proof in hand, the property may be sold by the time you get it.

Try to get financial proof in a document you can edit, like an unlocked PDF or a Microsoft Word file. That way, with approval, you can lower the amount to match the offer price so the seller doesn’t know you can afford more than you’re offering.

5. Construct Your Timeline

Have you ever tried to walk by taking a bunch of right steps and then left steps? If you take your steps out of order, you’ll probably fall over and hurt yourself. That’s why we put one foot in front of the other.

Likewise, when buying a home, there’s a proper order to follow to prevent costly mistakes. Here are some of the steps that need to be completed:

  1. Decide when you want to buy
  2. If you’re financing the purchase,
    • Research lenders
    • Select a lender
    • Get prequalified
    • Save money for closing costs
  3. If you’re a cash buyer,
    • Get proof of fund
    • Liquidate investments
  4. If you need to sell another property to buy a lake property,
    • Decide when you want to sell
    • Get your house ready to sell (if you need to sell to buy)
    • List your house for sale
    • Accept an offer on your home
  5. Start searching for a lake property
  6. Start touring lake properties
  7. Perform due diligence on potential properties
  8. Make an offer
  9. Close on lake property
  10. Terminate lease (if renting)

Phase 2: Position To Offer

In this phase, you’ll position yourself to make a strong offer by completing the items in your timeline and taking steps to recognize opportunities when they come.

Complete Your Timeline

To submit a strong offer, you need to have confidence that you can complete the purchase by the closing date in your offer.  To have that confidence, you’ll need to complete the financial, home sale (if applicable), and due diligence parts of your timeline.

If you’re financing the purchase, they can help you find a great lender to get you pre-approved. Your offer will be stronger if you work with a local lender because deals using internet and out-of-state lenders are less likely to close due to processing delays and regulatory issues.

If you have to sell another property to close on your lake home, it would be ideal if both transactions closed on the same day. More likely, you’ll have to close on one before the other. This happens all the time, and your agent can explain your options. To learn more, check out this blog article.

When you’ve found a property that you want to make an offer on, perform some due diligence to uncover and eliminate any potential issues. Ideally, you’ll want to complete your research before touring a property, just in case you want to make an immediate offer. Some of the documents you may wish to review will include the following:

Recognize Opportunities

When a new lake listing hits the market, how will you recognize if it’s a good value or a rare opportunity you might not see again for years?

For starters, you can work with a lakefront specialist who works on lakefront deals and studies the market day after day. Over time, they develop an instinct for valuing lake property and recognizing great opportunities.

However, with so much at stake, it will be easier to take action if you can see and recognize opportunities yourself. There are three ways to develop that ability:

  • Expand your search to include properties outside your price range. This will give context to the properties you can afford.
  • Expand your search to get listing alerts on other lakes. This will help you get a feel for how often properties list on your most preferred lake compared to other lakes.
  • Subscribe to our monthly Lakefront Market Report. This report breaks down the waterfront market into six price ranges and provides insights into each price range and the overall market. Sign up on any lake page!

Phase 3: Make The Offer

Lake homes don’t list as often as other properties, and it can take months or even years to find the right property. So when you finally find it, take advantage of the opportunity, or it may take several more months or years to find another. Act quickly and make your best offer right away!

Offer Price

When it comes to price, don’t mess around with lowball offers. Make an offer close to or over list price.

When this article was written, lake homes in our area were currently selling for 96% of their list price on average. However, don’t just offer 4% under the list price.  That statistic changes monthly and varies by price range, so ask us for current market information. More importantly, every property is different. Some are underpriced and will attract lots of buyers and sell for more than their list price. Other properties are way overpriced, usually by sellers who are in no hurry to move or are more interested in turning a profit.

The best way to estimate a property’s value is to look at what comparable properties have sold for. Your agent can look up past sales on the same lake.

If nothing comparable has sold on the same lake for several years, and your agent specializes in lakefront properties, ask for their price opinion. A lakefront specialist will have a good feel for values on different lakes, much better than an agent who doesn’t specialize and certainly better than friends or relatives who haven’t bought or sold a lake property in years.

When you make the offer, be sure to also provide a letter of pre-approval or proof of funds. Your pre-approval amount or account balance should be the same or close to the offer price. You might be able to pay more, but the seller doesn’t need to know that!

Closing Date

Unless you know the sellers want to close on a specific date, an earlier closing date is usually more attractive to sellers. It shows that you’re serious about buying the property and provides less time for something to go wrong and derail the offer.

Earnest Money

Earnest money is a deposit a buyer makes to demonstrate their commitment to a real estate purchase transaction. It’s usually applied toward the property’s purchase price if the deal goes through. The more earnest money you offer, the more attractive the offer.

The purpose of the earnest money deposit is to show the seller that the buyer is serious about the purchase and to provide a financial incentive for the buyer to follow through with the transaction. If the buyer backs out of the deal for a reason not specified in the purchase contract, the seller may keep the earnest money deposit. However, if the seller breaches the contract, the buyer may be entitled to a deposit refund.

Inspection & Testing Contingencies

Inspection and testing contingencies allow you to have a professional inspect or test the property after the offer is accepted. Common inspections include home, well, and septic inspections. Common tests include water and radon tests. If an inspection or test report reveals defects, you can walk away from the deal with your earnest money returned if the seller doesn’t repair the defects or agree to a reduction in the purchase price.

While inspection and testing contingencies can protect you against undisclosed problems, they also weaken your offer because they delay closing, could end up costing the seller, and may cause the deal to fall apart. Whether or not to inspect or test will depend upon the age of the system, how well-maintained it appears, and your risk tolerance.

Home Sale Contingencies

A home sale contingency is unattractive to the seller since the offer is subject to forces outside their control.  Plus, some sellers need to close within a specific timeline, and they don’t want to waste time on an offer that could come apart after several weeks.

How unattractive a home sale contingency is will depend upon your current situation. Is your home currently for sale? Will you list it with an agent or try to sell it yourself? Do you already have an accepted offer on it? If so, does that buyer also have a home sale contingency?

If you know you’ll need to sell your home to buy a lake home, you should list it with an agent before touring lake properties and price it to attract an offer as quickly as possible. Otherwise, any offer you make will be much weaker.

Other Contingencies

If possible, try and avoid needing additional contingencies.  For example, instead of including a flood insurance contingency, look the property up on FEMA’s website to see if it’s in the floodplain.   If it’s hard to tell, call your banker or insurance agent and ask for a flood determination before you make the offer.

Sometimes a contingency is unavoidable.  For example, you’ll need a financing contingency if you’re getting a mortgage to buy the property.

Personal Letter

Some buyers think writing a personal letter to the seller will strengthen their offer by establishing a connection with the seller.  However, this doesn’t always work.

Letting a seller know how much you want to buy their house can make you appear desperate or manipulative and can weaken your negotiating position. Instead, many expert negotiators believe it’s better if the seller thinks you’re willing to walk away if your offer isn’t accepted.

Bonus Tip

Purchasing a lakefront property is different from buying other forms of real estate. After all, you’re not just buying a property; you’re buying a lake and a lifestyle. And, there are many more factors to consider when evaluating a lake or making an offer on an expensive lakefront property.

There’s too much at stake to work with an average agent who doesn’t understand or have experience with lakefront property. You need a qualified lakefront specialist to help you avoid the common pitfalls unique to purchasing lake property. Some of the advantages of working with a lakefront buyer specialist include the following:

  • EXPERTISE – Are experts at finding lakes and properties that provide the lifestyle you want
  • KNOWLEDGE – Have extensive knowledge of local lakes and shoreline conditions
  • REPUTATION – Are skilled negotiators of lakefront provisions, offers, and amendments
  • INSIGHT – Have a deep understanding of the lakefront market, including trends and property values
  • REPRESENTATION – Represents you, not the seller (unlike the listing agent)
  • NO BUYER COMMISSION – The seller pays our commission.

Getting Started

To get started, select a lake that interests you, then click the blue button to sign up for listing alerts.

After you sign up, you’ll have the option of completing our free lake buyer orientation.  During the orientation, you’ll watch a few short videos and provide information we’ll use to:

  • Focus your search by property type and price
  • Identify other lakes that will provide the lifestyle you’re looking for
  • Understand your financial and scheduling considerations
  • Put together a customized action plan to position you to make a strong offer